Section 5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 5 of the Charitable Endowments Act, 1890 lets the appropriate Government settle a scheme for the administration of charitable property that is, or is to be, vested in the Treasurer of Charitable Endowments, and name the persons who will administer it. Because the Treasurer is only a bare holder of title, the scheme is how the charity is actually run.
This article explains section 5 of the Charitable Endowments Act, 1890 as amended up to the Jammu and Kashmir Reorganisation Act, 2019 (34 of 2019), per the consolidated text consulted on 3 October 2026. Later amendments, State notifications under section 1 and the State law on public trusts should be checked before relying on it.
Where a State law governs public trusts (for example the Maharashtra Public Trusts Act, 1950, the Rajasthan Public Trusts Act, 1959 or the Madhya Pradesh Public Trusts Act, 1951), that State law must be checked first.
On application, and with the concurrence of the applicants, the appropriate Government may settle a scheme for the administration of property that has been or is to be vested in the Treasurer, and may appoint persons, by name or office, other than the Treasurer, to administer it (section 5(1)). It may modify or substitute a scheme in the same way (section 5(2)). A scheme operates from a day the Government appoints and stays in force while the property remains vested or until it is modified or replaced (section 5(3)). It supersedes inconsistent decrees or directions, and its validity cannot be questioned in any Court, save as to whether the appropriate Government made it (section 5(4)).
Sub-section (1): settling a scheme
"On application made as hereinafter mentioned, and with the concurrence of the person or persons making the application, the , if it thinks fit, may settle a scheme for the administration of any property which has been or is to be vested in the Treasurer of Charitable Endowments, and may in such scheme appoint, by name or office, a person or persons, not being or including such Treasurer, to administer the property."
Four points: a scheme needs an application and the concurrence of the applicants; the Government acts "if it thinks fit"; the scheme may cover property already vested or yet to be vested; and the administrators are appointed by name or by office and cannot be the Treasurer. The application is made in the way set out in section 6. Vesting itself is in section 4.
Sub-section (2): modification or substitution
"On application made as hereinafter mentioned, and with the concurrence of the person or persons making the application, the may, if it thinks fit, modify any scheme settled under this section or substitute another scheme in its stead." The concurrence of those applying is again required. If you are preparing a scheme document or a modification, our agreement drafting team can help with the text.
Sub-section (3): operation and duration
"A scheme settled, modified or substituted under this section shall, subject to the other provisions of this section, come into operation on a day to be appointed by the in this behalf, and shall remain in force so long as the property to which it relates continues to be vested in the Treasurer of Charitable Endowments or until it has been modified or another such scheme has been substituted in its stead."
| Question | Answer in the text |
|---|---|
| When does the scheme begin? | On a day appointed by the appropriate Government |
| How long does it last? | While the property remains vested in the Treasurer, or until modified or replaced |
Sub-section (4): effect on decrees and directions
"Such a scheme, when it comes into operation, shall supersede any decree or direction relating to the subject-matter thereof insofar as such decree or direction is in any way repugnant thereto, and its validity shall not be questioned in any Court, nor shall any Court give, in contravention of the provisions of the scheme or in any way contrary or in addition thereto, a decree or direction regarding the administration of the property to which the scheme relates."
The effect is strong: an inconsistent decree or direction gives way to the scheme, the scheme's validity cannot be questioned in any Court, and no Court may give a decree or direction contrary to, or in addition to, the scheme. The proviso (in square brackets in the copy) keeps one inquiry open: "nothing in this sub-section shall be construed as precluding a Court from inquiring whether the Government by which a scheme was made was the appropriate Government." The Court cannot test the merits of the scheme, but it may ask whether the right Government made it. The identity of the appropriate Government is explained in sections 3 and 3-A.
Sub-section (5): the wishes of the author of the trust
"In the settlement of such a scheme effect shall be given to the wishes of the author of the trust so far as they can be ascertained, and, in the opinion of the , effect can reasonably be given to them." The wishes of the author of the trust, usually found in the deed, are therefore a guide, limited by what can be ascertained and what the Government thinks can reasonably be given effect.
Sub-section (6): scheme for property not yet vested
"Where a scheme has been settled under this section for the administration of property not already vested in the Treasurer of Charitable Endowments, it shall not come into operation until the property has become so vested." A scheme for property that is to be vested later cannot start before the vesting.
A comparison with Maharashtra
The Maharashtra Public Trusts Act, 1950 has its own provision on framing, amalgamating or modifying a scheme in section 50A; see Section 50A of the Maharashtra Public Trusts Act, 1950. Section 5 of the Charitable Endowments Act, 1890 deals with schemes for property vested in the Treasurer, while section 50A of the Maharashtra Act operates under that State's Act in Maharashtra. Neither provision stands in for the other.
Worked example
An invented trust, the Shri Ahilya Chikitsa Nidhi, holds a fund to give medical relief to poor patients, and its trustees wish the fund to be vested in the Treasurer. They apply together to the appropriate Government for a vesting order and for a scheme, and the Government agrees the scheme with them. The scheme names the office of the Medical Officer of a district hospital as the administrator of the fund, and the Government appoints a day for it to start. The scheme follows the wishes of the founder as the deed shows them.
Practical points
- Make sure every person who must apply has concurred before the application goes in.
- Check the deed for the author's wishes and put them in front of the Government.
- Name the administrators by office where the post will outlast the individual.
- Remember that a scheme for property not yet vested starts only when the vesting happens.
Need help with a scheme?
A scheme governs the charity for as long as the property stays vested, so its wording matters. We can draft or review the scheme, check it against the deed and prepare the application papers. Reach us through agreement drafting to begin.
Key takeaways
- The appropriate Government may settle, modify or substitute a scheme only with the concurrence of those applying (section 5(1) and (2)).
- Administrators are appointed by name or office and cannot include the Treasurer.
- A scheme starts on an appointed day and lasts while the property remains vested, unless modified or replaced.
- It supersedes repugnant decrees or directions; its validity cannot be questioned in any Court, except whether the appropriate Government made it.
- The wishes of the author of the trust are to be followed so far as they can be ascertained and reasonably given effect.
Read next
- Section 4 of the Charitable Endowments Act, 1890: vesting property in the Treasurer
- Section 6 of the Charitable Endowments Act, 1890: how to apply for a vesting order or a scheme
- Section 50A of the Maharashtra Public Trusts Act, 1950: framing, amalgamating or modifying a scheme
Disclaimer: Based on the Charitable Endowments Act, 1890 and the Charitable and Religious Trusts Act, 1920 as amended up to the Jammu and Kashmir Reorganisation Act, 2019, as consulted on 3 October 2026. State laws on public trusts and religious endowments, State notifications under the 1920 Act and later amendments should be checked. This article is general information, not legal advice; check the official text before acting.